Balancing Act: The Perils of Budgeting
For years, I've not had a budget because I didn't think I needed one. I never spent more money than I made and I entered every transaction into my checkbook as soon as I made it (or, well, enough of them that it didn't much matter, anyway). I was sure to save some of my money (I even got a high-yield account from ING), and I even invested a little. I thought that budgets were for people who spent too much, and I simply didn't.
When Dave and I were engaged, we sat down and had The Finances Talk. We shared how much we made, how much we liked to spend, what was important to each of us when it came to money, etc. In these conversations, we realized that, if we want to pay off our loans early AND put money into my 403b AND have savings for fun and emergencies, we would have to live on a tighter budget than either of us had ever experienced.
This launched us into the land of budgets. When we set it up, we did so to limit our spending. We used PearBudget and it worked wonders (Seriously...I'm not doing product reviews here, but check them out. It's even free!!). We set up categories, put our savings and school loan payments in first, and then moved the numbers around until they came to an approximation of what we make every month. It was that easy.
Or so I thought!
What I didn't realize about a budget, as opposed to just balancing your checkbook faithfully every month, is that a budget doesn't necessarily help you stop spending. What it really does is helps you allocate your money and analyze your spending. If you keep it up faithfully during the month, it helps you know when to stop buying things. It also shows you where your money is going, which can help you see what is and is not a financial priority.
The problem? There are some of these things that I DIDN'T WANT TO KNOW!
I don't really want to know, for instance, that I spent almost $30 on my turtle this month. Now, it's just $30...but on the turtle!!??!? I love Cummings and all, but he's still just a turtle. I also didn't want to remember how many times Dave and I went to In 'N Out. It's not MacDonald's, but it's not where I want to drop my stash, either. I also didn't realize how much I like to spend on gifts and things for other people. What am I supposed to be--stingy?
As it turns out, our budget has raised more questions than it has given answers. Because Dave and I both can be (and have been, in this situation) fairly disciplined people, the budget has helped us spend less than we might have without it. It has forced us, in some cases, to choose where we want our money to go (Valentine's dinner out, or several more In 'N Out runs?). But it has also forced us to question ourselves and our spending. It has forced us to see how much more we'd be able to pay on the loans if we were cooking hamburgers at home.
In the end I'm glad, I guess, that we have the budget (though I kind-of feel like I have to say that. I am, after all, a PF blogger.) Even though some of them are small, the questions force us to do more than run on autopilot. They make us actually choose where we spend our money, and (sometimes!) explain to each other why we chose to spend it there. And that seems like a good thing. Many times we choose to make the same decision that we would have made on autopilot, but the fact that it is deliberate and definitive means that we are spending the money and aren't left wondering where it all went at the end of the month.
Consider yourselves warned, though. Starting a budget is so easy, but keeping with it so it can actually help you is harder than it seems!